Cabinet denies companies’ requests to exclude Caymanian participation Loop Cayman Islands

Black Immigrant Daily News

The Cabinet Office reported that the Cabinet recently rejected applications by two companies seeking exemption from the general requirement to have Caymanian participation.

General rule

For those who are unfamiliar with the general rule, the Local Companies (Control) Act requires a local company carrying on business in Cayman to comply with a number of rules, including the following:

the company must be Caymanian controlledat least sixty per cent of its shares must be beneficially owned by Caymaniansat least sixty per cent of its directors must be Caymanians

However, the general rule can be bypassed if a person makes a special application under the Local Companies (Control) Act (in fact many companies have made successful applications over the years, especially in the case of self-employed real estate agents and property developers).

Application

To complete the application to avoid Caymanian participation, the relevant company simply has to submit a processing fee of two hundred dollars, a licence fee of two thousand five hundred dollars, copies of corporate documents and a statement setting out the nature of the business the company is carrying on and proposes to carry on.

Grant of licence

Before granting the 12 year licence to the relevant company to conduct business without seeking Caymanian participation, a number of things must be considered. These include:

Cayman’s economic situation Due protection of persons already engaged in business in Caymanthe number of additional people from outside Cayman who would be required to reside in Cayman if the application is grantedthe efforts made by the company to obtain Caymanian participation

Cabinet refusals

In the case of the two companies which had applications before the Cabinet, it is understood from the Cabinet meeting summary that each company applied for an exemption from the requirement to show “efforts made by the company to obtain Caymanian participation.”

Although the deliberations surrounding the exemption application are not disclosed in the Cabinet meeting summary, the outcome is that the exemptions were ultimately refused. This may mean that the companies may now have to demonstrate “efforts” to obtain Caymanian participation, which typically includes advertisement of the relevant job and interviewing local candidates.

More info

For a list of companies that were granted these types of exemptions by the Cayman Islands government over the years, please see the below link.

Link: https://www.dci.gov.ky/licensing/local-companies-control-licensing/reports

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